Red-hot cocoa price melts profit at top chocolate supplier

Barry Callebaut, the world's biggest supplier of chocolate to the food industry, said Wednesday that the surge in global cocoa prices had chipped away at profits.

In the first half of its fiscal year to the end of February, net profit fell by two-thirds to 76.8 million Swiss francs (£67m).

The firm said revenues jumped 19 per cent in local currency and 11 per cent in Swiss francs thanks to the effect of rising cocoa prices, while sales in volume terms were largely steady, edging up 0.7 per cent to 1.1 million tonnes.

On Monday, New York cocoa futures hit a record high of nearly $10,500 per tonne, having soared 140 per cent since the start of the year. That is after rising more than 60 per cent last year after concerns about supplies.

"Food manufacturers continued to be impacted by soft consumer demand in the context of the high-inflationary environment," Barry Callebaut said in a statement.

Nevertheless it said it was able to increase chocolate sale volumes by 1.0 per cent despite data showing the global confectionary market contracted by 2.0 per cent as it shifted toward private labels that target cost-conscious consumers.

Its cocoa sales volume dipped 0.7 per cent as the market it was impacted by rising prices.

Chief executive Peter Feld called the first half financial performance solid given the market context.

"We retain some caution given the extraordinary price spikes over the past six months and potential implications for our customers and supply partners," he said.